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Tis' the season for pharma's tricks

In its own way pharma offers the world a chill blast of reality during the holiday season. For years the industry pointed to George Merck's supposed statement, "Medicine is for the people...not for the profits," as an admonition from Santa Claus. After a week of admitting shoddy behavior, that seems as credible as a fat man sliding down a billion chimneys during one night.

The Christmas season is one of enchantment, myth, childhood wishes and the noble spirit of peace on earth and good will toward all men.  It remains for pharma to bring us back to hard reality.  During a year-end flourish, several companies have acknowledged their illegal kickbacks to physicians, off-label marketing and Medicare fraud.  As a star atop this tree, Pfizer also announced it will eliminate 600 rep positions in the US, amounting to 20% of their primary care sales force here.

One cynical ex-Mercker privately wrote that this rush of pharma disclosures at least demands recognition of the drug industry's literary acumen.  In his view they consistently emulate characters from Charles Dickens, either by recreating the thieves and pickpockets of Oliver Twist or by enacting Ebeneezer Scrooge from A Christmas Carol.

GlaxoSmithKline (GSK) led pharma's version of a holiday list.  GSK has been a stalwart presence in the Delaware Valley ever since 1830, when John K. Smith opened its first Philadelphia pharmacy.  This month they agreed to pay US drug wholesalers $150 million for abusing the consumer's "petition process," thereby, preventing generic versions of its allergy product, Flonase, from entering the market.  GSK accompanied its agreement to pay this tidy sum with a statement that must have been as difficult to maneuver around their spokesman's tongue as a dowager aunt's fruitcake.  "The settlement is not an admission...of any violation...or wrongdoing," according to a company communique.  Instead GSK paid this sum to remove "protracted disruption, expense and uncertainty."

Such tortured language is the typical, illegitimate offspring of lawyers and PR specialists.  Some skeptics might claim that the only uncertainty removed by paying $150 million concerns whether any hanky panky actually occurred..

The next pharma company on Santa's naughty list was the Paris-based Sanofi, which maintains US offices in Bridgewater, New Jersey and in Malvern.  Sanofi agreed to pay the Justice department $109 million to make charges concerning illegal kickbacks to physicians and Medicare fraud go away.

It appears Sanofi gave free samples of its knee injection. Hyalgan, to physicians as inducements for them to purchase and prescribe the treatment.  The company accomplished this, according to the Justice Department, by providing their reps with thousands of free samples to give to physicians.  The physicians then turned around and billed Medicare, as well as other insurers, for the Hyalgan at full price.  Needless to say, the payers received no documentation from the company to indicate that physicians obtained a substantial proportion of their Hyalgan gratis. Joyeux Noël!!

Also on the police blotter, rather, the Christmas list, was Amgen, the company that every biotech hopes to be when it grows up.  Amgen agreed this week to pay $762 million to settle federal investigations (see here) that it marketed several of its top-selling drugs, such as Enbrel and Neulasta, off-label (i.e., for uses not approved by the FDA).  Not to be outdone by the French, Amgen also gave kickbacks to physicians and clinics as prescribing inducements.  These took the form of "cash, rebates, free samples, educational and research grants, dinners and travel."  At the same time, the government also charged the company with "knowingly misreporting the prices" it charged favored physicians, thereby enabling billing fraud of payers.

Amgen was obliged to pay $762 of their shareholders' money because several of their own reps filed whistleblower suits that documented these practices.  The situation must have resembled a revolt of the elves at Santa's workshop.

Some reps testified they were encouraged to overfill bottles of Amgen's anemia product, Aranesp, for physicians.  That basically gave the docs free doses of the product for which they billed Medicare and other insurers at full price.  Reps honed their pitches using "spreadsheets [that] show[ed] doctors how much more money they could make using Aranesp" with the free fills.

According to one whistleblower's attorney, Amgen gave physicians "a kickback in the form of extra product subsidized by the taxpayers."

Pharma's form of four calling birds arrived when Eli Lilly agreed to pay $29.4 million as a settlement for bribing foreign government officials to win business (See here).  The U.S. Securities and Exchange Commission charged Lilly with violating the Foreign Corrupt Practices Act by bribing government officials in Russia, Brazil, China and Poland between 1994 and 2009.

Lilly was certainly cosmopolitan in using local henchmen as middle men to facilitate government bribes.  In 2007 they hired a Brazilian drug distributor to bribe state health officials in connection with selling a Lilly drug.  In Poland they paid a charity run by the head of a regional government health authority.  Lilly's Russian subsidiary paid millions of dollars to offshore conduits that, according to the SEC, were "funnel[led] to government officials" for the purpose of obtaining business.

OK, enough with the fines.  Now for some vanilla conflict of interest.

In a piece of diligent database reporting, The Milwaukee Journal-Sentinel examined a number of medical specialty societies and other organizations (e.g., the National Kidney Foundation, the American Diabetes Association) that develop treatment guidelines.  Primary care physicians and specialists that treat various conditions rely on those guidelines as standards of care.  The guidelines recommend medications and, just as importantly, they specify surrogate goals (for example, laboratory results) for treating patients.

Pharma companies maintain a keen interest in treatment guidelines/goals because higher or more difficult goals typically require using more or newer branded drugs.  The Milwaukee journalists found that in nine major conditions (gastroesophageal reflux, Crohn's disease, COPD, high cholesterol, anemia, Type 2 diabetes, depression, asthma and HIV/AIDS), between 73% and 100% of physicians on the guideline panels of the pertinent organizations maintain major ties to pharmaceutical companies.  In another six conditions (pain, low white blood cell counts, cardiovascular issues, rheumatoid arthritis, high cholesterol and colon cancer) between 34% and 67% of guideline panelists maintain pharma company ties.

One can understand the way the process works by looking at how the guidelines for LDL-cholesterol, the so-called bad cholesterol, evolved over several years.  Not too long ago, guidelines advised reaching LDL-cholesterol levels of 120 mg/dL.  Then cardiologists lowered that goal to 100 mg/dL, claiming the lower LDL would reduce the incidence of strokes and heart attacks.  Not long after that, recommended LDL-cholesterol levels dropped to 70 mg/dL.

Each reduction required using newer, more potent statins.  In the process pharmas earned tens of billions of dollars from chanting the phrase, "the lower, the better" to primary care physicians.  Few physicians could follow the money to appreciate what was taking place.  Panelist physicians from the American College of Cardiology and other organizations which set the cholesterol standards were receiving millions of dollars from pharma companies that benefitted from more stringent recommendations.

This stocking full of pharma news came during just one week in December!!  In its own way pharma offers the world a chill blast of reality during the holiday season.  For years the industry pointed to George Merck's supposed statement, "Medicine is for the people...not for the profits," as an admonition from Santa Claus.  After a week of admitting shoddy behavior, that seems as credible as a fat man sliding down a billion chimneys during one night.

-Dan Hoffman